DIW business barometer: optimism at the end of the year – really?

The latest publication is the Economic Barometer of the German Institute for Economic Research (DIW). For the second month in a row, it rose (by 1.5 to 93 points), and the DIW itself says that it has good prospects for the end of the year. But the DIW’s detailed statements no longer sound so optimistic. Quote:

However, it remains well below the 100-point mark, which stands for an average increase in economic output. Gross domestic product is expected to fall slightly in the fourth quarter, by 0.1 percent. “As things stand now, we can only hope for a red zero at best,” says DIW head of the economy Claus Michelsen, “because industry is still in reverse gear in the final quarter. More so than expected in November. However, there are signs of improvement, as companies are now looking to the future with greater confidence, especially with regard to foreign business.

Despite less dynamic growth, the bottom line is that employment growth is continuing. “The industrial slump is likely to only temporarily burden the labor market. From spring onwards, the number of unemployed should fall again,” says Simon Junker, an expert on the German economy. The service sectors continue to benefit from the private consumption mood. In addition, the coming year will start under good omens. Fiscal policy measures are already boosting consumer incomes at the beginning of the year. Consumers, for their part, are likely to continue to consume strongly, thus boosting consumer-related service providers.

The following chart shows the change in the DIW economic barometer in quarterly steps.

Konjunkturbarometer des DIW
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